The long-awaited emissions trading in China is about to start.
The platform for buying and selling pollution certificates will be activated on Friday, July 16, the Shanghai Environment and Energy Exchange announced on Thursday.
The so-called ETS program is intended to help the world's second largest economy to reduce emissions and, as planned, not to emit more CO2 in 2060 than can be broken down by plants.
In the first phase of the world's largest emissions trading system, more than 2000 power plants will be included in the program.
They are responsible for four billion tons of CO2 emissions per year.
That's about 40 percent of the country's total emissions.
With CO2 certificates, companies acquire the right to emit greenhouse gases.
The trade should create an incentive to invest money in a climate-friendly modernization of the plants.
Similar to Europe, the government will distribute a certain amount of certificates to the companies free of charge.
If they emit more CO2, they have to purchase additional certificates on the exchange.
If your emissions remain below a certain target value, you can turn excess certificates into cash.